Hey,
I am new to Raspberry Pi and the terminal. I want to write a simple python program that can display a JPEG but I am having issues downloading/installing PIL (Python Imaging Library)/Pillow. I tried to do sudo apt-get and it says it is done but then it doesn't work. I also tried downloading the module and saving the files but now how do I actually install it?

Also, is there a specific place that I should have saved the Pillow-2.3.0 module file? I have it currently saved inside /home/pi and am not sure if this could be contributing to the problem that I am having.

Yes, I would again with installing python-dev and python-setuptools. If you get any error messages you can't resolve just report back here.

Also, is there a specific place that I should have saved the Pillow-2.3.0 module file? I have it currently saved inside /home/pi and am not sure if this could be contributing to the problem that I am having.

IIRC you can put it anywhere, but you have to extract it and then use the setup line you used. The setup will normally take care of the rest. It could be that you have use 'sudo'.

As said, since you don't know what error message you got I would just start from the beginning again.

I added the last line for debugging because iml.show didn't output anything even though the program ran succesfully. I have read online that apparently I have to download the xv utility for iml.show() to work. Is that right? Or could it be because of my previous issues?

For most major unix distributions Pillow has now replaced (the deprecated) PIL. However, for some unknown reason, raspbian continues to hide it away in jessie. NB raspbian maintainers, please move it over SOON!
This is the quickest way to get Pillow/PIL but not feasible from an installation script

you need to add an additional line to /etc/apt/sources.list:
deb http://mirrordirector.raspbian.org/raspbian/ jessie main contrib non-free rpi
(i.e. the same as the existing line but with jessie for wheezy) then run:
sudo apt-get update
sudo apt-get install python-pil
or
sudo apt-get install python3-pil

also https://groups.google.com/forum/?hl=en-GB&fromgroups=#!forum/pi3d